EX-99.1 2 rtn-01262017xexhibit991x8k.htm PRESS RELEASE Exhibit
Exhibit 99.1

rtnlogo1a01a06a01a08.jpg
 
 
Raytheon Company
rtnline1a01a06a01a08.jpg
 
 
Global Headquarters
 
 
Waltham, Mass.
 
 
 
 
 
Investor Relations Contact
 
 
Todd Ernst
 
 
 
781.522.5141
 
 
 
 
 
 
 
Media Contact
 
 
 
Corinne Kovalsky
 
 
 
781.522.5899
For Immediate Release

Raytheon Reports Strong Fourth Quarter and Full-Year 2016 Results

•
Strong bookings of $7.6 billion in the quarter and a record $27.8 billion for the year; book-to-bill ratio of 1.21 in the quarter and 1.16 for the year
•
Fourth quarter net sales of $6.2 billion; full-year net sales of $24.1 billion, up 3.5 percent for the year
•
Fourth quarter EPS from continuing operations of $1.84; full-year EPS from continuing operations of $7.44
•
Strong operating cash flow from continuing operations of $1.1 billion in the quarter and $2.9 billion for the year, including a $500 million pretax discretionary pension plan contribution in the fourth quarter
__________________________________________________________________________________________________

WALTHAM, Mass., (January 26, 2017) - Raytheon Company (NYSE: RTN) today announced net sales for the fourth quarter 2016 of $6.2 billion compared to $6.3 billion in the fourth quarter 20151. Fourth quarter 2016 EPS from continuing operations was $1.84 compared to $1.85 in the fourth quarter 2015. Fourth quarter 2016 EPS from continuing operations included a favorable FAS/CAS Adjustment of $0.26 compared to a favorable FAS/CAS Adjustment of $0.10 in the fourth quarter 2015.
The Company made a pretax discretionary pension plan contribution in both the fourth quarter 2016 and the fourth quarter 2015, discussed further below, which had an unfavorable tax-related EPS impact of $0.04 and $0.02, respectively. The 2016 discretionary pension plan contribution was not included in the Company's prior guidance.
Net sales in 2016 were $24.1 billion, up 3.5 percent compared to $23.2 billion in 2015. Full-year 2016 EPS from continuing operations was $7.44 compared to $6.75 for the full-year 2015.
"I’m pleased with the Company’s operating performance in 2016. We delivered solid sales and earnings growth by executing our strategy and investing in advanced capabilities that align with our global customers’ evolving requirements," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Strong domestic and international bookings throughout the year drove an increase in our backlog, which positions us well for growth in the future."
The Company generated strong operating cash flow for both the fourth quarter and full-year. Operating cash flow from continuing operations for the fourth quarter 2016 was $1.1 billion compared to $0.8 billion for the fourth quarter 2015. Fourth quarter 2016 operating cash flow from continuing operations included a $500 million pretax

1 Fourth quarter 2016 had 4 fewer work days than fourth quarter 2015.
1

discretionary cash contribution to the Company’s pension plans compared to $200 million in the fourth quarter 2015. For the full-year 2016 and 2015, the Company generated $2.9 billion and $2.3 billion of operating cash flow from continuing operations, respectively.
 
Summary Financial Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4th Quarter
 
%
 
Twelve Months
 
%
($ in millions, except per share data)
2016
 
2015
 
Change
 
2016
 
2015
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
$
7,577

 
$
7,861

 
-3.6%
 
$
27,836

 
$
25,227

 
10.3%
Net Sales
$
6,238

 
$
6,328

 
-1.4%
 
$
24,069

 
$
23,247

 
3.5%
Income from Continuing Operations attributable to Raytheon Company
$
544

 
$
558

 
-2.5%
 
$
2,210

1 
$
2,061

2 
7.2%
EPS from Continuing Operations
$
1.84

 
$
1.85

 
-0.5%
 
$
7.44

1 
$
6.75

2 
10.2%
Operating Cash Flow from Continuing Operations
$
1,141

 
$
813

 
 
 
$
2,852

 
$
2,346

 
 
Workdays in Fiscal Reporting Calendar
57

 
61

 
 
 
249

 
249

 
 
1 Twelve months 2016 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the tax-free gain of $158 million and $0.53 impact, respectively, for the second quarter 2016 TRS transaction.
2 Twelve months 2015 Income from Continuing Operations attributable to Raytheon Company and EPS from Continuing Operations included the favorable $181 million pretax ($143 million after-tax) and $0.47 impact, respectively, for the first quarter 2015 eBorders settlement.
 
 
 
 
 
 
 
 
 
 
 
 
The Company had bookings of $7.6 billion in the fourth quarter 2016, resulting in a book-to-bill ratio of 1.21. Fourth quarter 2015 bookings were $7.9 billion. Full-year 2016 bookings were a record $27.8 billion, resulting in a book-to-bill ratio of 1.16. Full-year 2015 bookings were $25.2 billion.
Backlog
 
 
 
($ in millions)
 Period Ending
 
2016
 
2015
Backlog
$
36,855

 
$
34,669

Funded Backlog
$
25,604

 
$
25,060

Backlog at the end of 2016 was $36.9 billion, an increase of approximately $2.2 billion or 6 percent compared to the end of 2015. Funded backlog was $25.6 billion, an increase of approximately $0.5 billion compared to the end of 2015.
In the fourth quarter 2016, the Company repurchased 0.7 million shares of common stock for $100 million. For the full-year 2016, the Company repurchased 6.9 million shares of common stock for $900 million.
Outlook
The Company has provided its financial outlook for 2017. Charts containing additional information on the Company's 2017 outlook are available on the Company's website at www.raytheon.com/ir.
Effective January 1, 2017, the Company adopted the new revenue recognition standard utilizing the full retrospective transition method. Under this method, the standard was applied to each prior reporting period

2

presented and the cumulative effect of applying the standard was recognized at the earliest period shown. The impact of adopting the new standard on the Company's 2015 and 2016 net sales and operating income was not material. The 2016 net sales, effective tax rate and EPS from continuing operations in the financial outlook table below have been recast to reflect this change.
2017 Financial Outlook
 
 
 
 
 
 
2016 Actual
 
2017
 
As Reported
 
New Rev Rec1
 
Outlook1
Net Sales ($B)
24.1
 
24.1
 
24.8 - 25.3
Deferred Revenue Adjustment ($M)2
(77)
 
(77)
 
(33)
Amortization of Acquired Intangibles ($M)2
(121)
 
(121)
 
(127)
FAS/CAS Adjustment ($M)
435
 
435
 
428
Interest Expense, net ($M)
(216)
 
(216)
 
 (216) - (221)
Diluted Shares (M)
297
 
297
 
291 - 293
Effective Tax Rate
28.3%
 
28.3%
 
 ~31.5%
EPS from Continuing Operations3
$7.44
 
$7.55
 
$7.20 - $7.35
Operating Cash Flow from Continuing Operations ($B)
2.9
 
2.9
 
 2.8 - 3.1
1 Effective January 1, 2017, the Company adopted the new revenue recognition standard, Accounting Standards Update 2014-09. The 2016 Actuals - New Rev Rec and the 2017 Outlook above reflect this change.
2 Deferred Revenue Adjustment and Amortization of Intangibles represent the unfavorable impact of the acquisition accounting adjustments to record acquired deferred revenue at fair value and the amortization of acquired intangible assets, respectively, for all of the business segments.
3 2016 EPS from Continuing Operations included the $0.53 tax-free gain for the second quarter TRS transaction.


Segment Results
The Company's reportable segments are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.
The pro-forma attachments at the end of this release present prior period consolidated and segment data recast to reflect the adoption of the new revenue recognition standard discussed above. The business results discussed below do not reflect these changes, because they became effective January 1, 2017.
Integrated Defense Systems
 
 
 
 
 
 
 
 
 
 
 
4th Quarter
 
 
 
Twelve Months
 
 
($ in millions)
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Net Sales
$
1,406

 
$
1,558

 
-10%
 
$
5,476

 
$
5,847

 
-6%
Operating Income1
$
219

 
$
281

 
-22%
 
$
950

 
$
864

 
NM
Operating Margin1
15.6
%
 
18.0
%
 
 
 
17.3
%
 
14.8
%
 
 
1 Twelve months 2016 operating income and operating margin include the $158 million tax-free gain from the second quarter TRS transaction.
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems (IDS) had fourth quarter 2016 net sales of $1,406 million compared to $1,558 million in the fourth quarter 2015. IDS had full-year 2016 net sales of $5,476 million compared to $5,847 million in 2015. The change in net sales for both the quarter and the full-year was primarily driven by lower net sales on an international communications program and on the Air Warfare Destroyer (AWD) program. In addition, the full-year was also driven by lower net sales on various missile defense radar production programs.

3

IDS recorded $219 million of operating income in the fourth quarter 2016 compared to $281 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by a favorable contract modification on the AWD program in the fourth quarter 2015 and lower volume in the fourth quarter 2016. IDS recorded $950 million of operating income in 2016 compared to $864 million in 2015. Operating income for the full-year 2016 included the $158 million tax-free gain from the second quarter TRS transaction.
During the quarter, IDS booked approximately $1.0 billion to provide advanced Patriot air and missile defense capabilities for multiple international customers. IDS booked $189 million to provide Consolidated Contractor Logistics Support (CCLS) and $144 million on the AN/TPY-2 radar sustainment program for the Missile Defense Agency (MDA). IDS also booked $110 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy.
Intelligence, Information and Services
 
 
 
 
 
 
 
 
 
4th Quarter
 
 
 
Twelve Months
 
 
($ in millions)
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Net Sales
$
1,518

 
$
1,537

 
-1%
 
$
6,194

 
$
6,111

 
1%
Operating Income1
$
121

 
$
111

 
9%
 
$
467

 
$
646

 
NM
Operating Margin1
8.0
%
 
7.2
%
 
 
 
7.5
%
 
10.6
%
 
 
1 Twelve months 2015 operating income and operating margin include the favorable $181 million impact for the first quarter eBorders settlement.
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
Intelligence, Information and Services (IIS) had fourth quarter 2016 net sales of $1,518 million compared to $1,537 million in the fourth quarter 2015. IIS had full-year 2016 net sales of $6,194 million compared to $6,111 million in 2015. The change in net sales for the full-year was primarily driven by higher net sales on cybersecurity and special mission programs.
IIS recorded $121 million of operating income in the fourth quarter 2016 compared to $111 million in the fourth quarter 2015. The change in operating income for the quarter was primarily driven by higher net program efficiencies in the fourth quarter 2016. IIS recorded $467 million of operating income in 2016 compared to $646 million in 2015. Operating income for the full-year 2015 included the favorable $181 million impact for the first quarter eBorders settlement.
During the quarter, IIS booked $90 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $448 million on a number of classified contracts.
Missile Systems
 
 
 
 
 
 
 
 
 
4th Quarter
 
 
 
Twelve Months
 
 
($ in millions)
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Net Sales
$
1,895

 
$
1,879

 
1%
 
$
7,071

 
$
6,556

 
8%
Operating Income
$
260

 
$
258

 
1%
 
$
916

 
$
868

 
6%
Operating Margin
13.7
%
 
13.7
%
 
 
 
13.0
%
 
13.2
%
 
 
Missile Systems (MS) had fourth quarter 2016 net sales of $1,895 million compared to $1,879 million in the fourth quarter 2015. MS had full-year 2016 net sales of $7,071 million compared to $6,556 million in 2015. The increase in net sales for the full-year was primarily driven by higher net sales on the Paveway™ program.

4

MS recorded $260 million of operating income in the fourth quarter 2016 compared to $258 million in the fourth quarter 2015. MS recorded $916 million of operating income in 2016 compared to $868 million in 2015. The increase in operating income for the full-year was primarily due to higher volume in 2016.
During the quarter, MS booked $362 million for Paveway™, $309 million for Tomahawk, $259 million for the Rolling Airframe Missile (RAM™) program, $208 million for the Stinger® weapon system, $193 million for Evolved Seasparrow Missiles (ESSM®), $141 million for Standard Missile-3 (SM-3®), $114 million for Phalanx® close-in weapon systems, $76 million for Miniature Air Launched Decoy (MALD®), and $76 million for the David's Sling weapon system's Stunner Missile. MS also booked $175 million for the Hypersonic Air-breathing Weapon Concept (HAWC) program for the Defense Advanced Research Projects Agency (DARPA) and the U.S. Air Force.
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
4th Quarter
 
 
 
Twelve Months
 
 
($ in millions)
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Net Sales
$
1,612

 
$
1,576

 
2%
 
$
6,199

 
$
5,796

 
7%
Operating Income
$
231

 
$
239

 
-3%
 
$
817

 
$
829

 
-1%
Operating Margin
14.3
%
 
15.2
%
 
 
 
13.2
%
 
14.3
%
 
 
Space and Airborne Systems (SAS) had fourth quarter 2016 net sales of $1,612 million compared to $1,576 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by higher net sales on an electronic warfare systems program and an international classified program. SAS had full-year 2016 net sales of $6,199 million compared to $5,796 million in 2015. The increase in net sales for the full-year was primarily due to higher net sales on classified programs.
SAS recorded $231 million of operating income in the fourth quarter 2016 compared to $239 million in the fourth quarter 2015. SAS recorded $817 million of operating income in 2016 compared to $829 million in 2015. The change in operating income for the quarter and the full-year was primarily driven by a change in program mix.
During the quarter, SAS booked $610 million for the production of Active Electronically Scanned Array (AESA) radars, $81 million to provide radar components and $75 million on a cryptographic modernization program, all for both U.S. and international customers. SAS also booked $467 million on a number of classified contracts.
Forcepoint
 
 
 
 
 
 
 
 
 
4th Quarter
 
 
 
Twelve Months
 
 
($ in millions)
2016
 
2015
 
% Change
 
2016
 
2015
 
% Change
Net Sales
$
143

 
$
133

 
8%
 
$
566

 
$
328

 
NM
Operating Income
$
11

 
$
11

 
-
 
$
51

 
$
30

 
NM
Operating Margin
7.7
%
 
8.3
%
 
 
 
9.0
%
 
9.1
%
 
 
NM = Not Meaningful
 
 
 
 
 
 
 
 
 
 
 
Forcepoint had fourth quarter 2016 net sales of $143 million, up 8 percent compared to $133 million in the fourth quarter 2015. The increase in net sales for the quarter was primarily driven by the acquisition of Stonesoft in the first quarter of 2016. Forcepoint recorded $11 million of operating income in both the fourth quarter 2016 and in the fourth quarter 2015.

5

Forcepoint had full-year 2016 net sales of $566 million compared to $328 million in 2015. Forcepoint recorded $51 million of operating income in 2016 compared to $30 million in 2015. The increase in both net sales and operating income for the full-year was primarily due to the acquisition of Websense in the second quarter of 2015 and Stonesoft in the first quarter of 2016.

About Raytheon
Raytheon Company, with 2016 sales of $24 billion and 63,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 95 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5ITM products and services, sensing, effects, and mission support for customers in more than 80 countries. Raytheon is headquartered in Waltham, Massachusetts. Follow us on Twitter.
Conference Call on the Fourth Quarter and Full-Year 2016 Financial Results
Raytheon's financial results conference call will be held on Thursday, January 26, 2017 at 9 a.m. ET. Participants will include Thomas A. Kennedy, Chairman and CEO; Anthony F. O'Brien, vice president and CFO; and other Company executives.
The dial-in number for the conference call will be (800) 510-9691 in the U.S. or (617) 614-3453 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.
Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the free required downloadable software are posted on the site.
Disclosure Regarding Forward-looking Statements
This release and the attachments contain forward-looking statements, including information regarding the Company's financial outlook, future plans, objectives, business prospects and anticipated financial performance. These forward-looking statements are not statements of historical facts and represent only the Company's current expectations regarding such matters. These statements inherently involve a wide range of known and unknown risks and uncertainties. The Company's actual actions and results could differ materially from what is expressed or implied by these statements. Specific factors that could cause such a difference include, but are not limited to: the Company's dependence on the U.S. Government for a significant portion of its business and the risks associated with U.S. Government sales, including changes or shifts in defense spending due to budgetary constraints, spending cuts resulting from sequestration, a government shutdown, or otherwise, uncertain funding of programs and potential termination of contracts; difficulties in contract performance; the resolution of program terminations; the ability to procure new contracts; the risks of conducting business in foreign countries; the unpredictability of timing of international bookings; the ability to comply with extensive governmental regulation and obtain approvals, including export and import requirements such as the International Traffic in Arms Regulations and the Export Administration Regulations, anti-bribery and anti-corruption requirements including the Foreign Corrupt Practices Act, industrial cooperation agreement obligations, and procurement and other

6

regulations; changes in government procurement practices; the impact of competition; the ability to develop products and technologies, and the impact of associated investments and costs; the ability to recruit and retain qualified personnel; the impact of potential security and cyber threats, and other disruptions; the risk that actual pension returns, discount rates or other actuarial assumptions, including the long-term return on asset assumption, are significantly different than the Company's current assumptions; the risk of cost overruns, particularly for the Company's fixed-price contracts; dependence on component availability, subcontractor and partner performance and key suppliers; risks of a negative government audit; risks associated with acquisitions, investments, dispositions, joint ventures and other business arrangements; the ability to grow in the government and commercial cybersecurity markets; risks of an impairment of goodwill or other intangible assets; the impact of financial markets and global economic conditions; the use of accounting estimates in the Company's financial statements; the outcome of contingencies and litigation matters, including government investigations; the risk of environmental liabilities; and other factors as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release and the attachments or to update them to reflect events or circumstances occurring after the date of this release, including any acquisitions, dispositions or other business arrangements that may be announced or closed after such date.

# # #

7

Attachment A
 
 
 
 
 
 
 
 
Raytheon Company
 

Preliminary Statement of Operations Information
 
 
 
 
 
 
 
 
Fourth Quarter 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16

31-Dec-15
 
 
 
 
 
 
 
 
 
Net sales
 
$
6,238

 
$
6,328

 
$
24,069

 
$
23,247

Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
4,655

 
4,808

 
17,947

 
17,574

General and administrative expenses
 
721

 
692

 
2,882

 
2,660

Total operating expenses
 
5,376

 
5,500

 
20,829

 
20,234

Operating income
 
862

 
828

 
3,240

 
3,013

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
Interest expense
 
58

 
58

 
232

 
233

Interest income
 
(4
)
 
(2
)
 
(16
)
 
(11
)
Other (income) expense, net
 
1

 
(2
)
 
(6
)
 
4

Total non-operating (income) expense, net
 
55

 
54

 
210

 
226

Income from continuing operations before taxes
 
807

 
774

 
3,030

 
2,787

Federal and foreign income taxes
 
266

 
220

 
857

 
733

Income from continuing operations
 
541

 
554

 
2,173

 
2,054

Income (loss) from discontinued operations, net of tax
 
—

 
13

 
1

 
13

Net income
 
541

 
567

 
2,174

 
2,067

Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
 
(3
)
 
(4
)
 
(37
)
 
(7
)
Net income attributable to Raytheon Company
 
$
544

 
$
571

 
$
2,211

 
$
2,074

 
 
 
 
 
 
 
 
 
Basic earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.84

 
$
1.85

 
$
7.45

 
$
6.76

Income (loss) from discontinued operations, net of tax
 
—

 
0.04

 
—

 
0.04

Net income
 
1.84

 
1.89

 
7.45

 
6.81

 
 
 
 
 
 
 
 
 
Diluted earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.84

 
$
1.85

 
$
7.44

 
$
6.75

Income (loss) from discontinued operations, net of tax
 
—

 
0.04

 
—

 
0.04

Net income
 
1.84

 
1.89

 
7.44

 
6.80

 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
544

 
$
558

 
$
2,210

 
$
2,061

Income (loss) from discontinued operations, net of tax
 
—

 
13

 
1

 
13

Net income
 
$
544

 
$
571

 
$
2,211

 
$
2,074

 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
Basic
 
294.2

 
301.6

 
296.5

 
304.8

Diluted
 
294.5

 
302.1

 
296.8

 
305.2





Attachment A - Pro Forma
 
 
Raytheon Company
 
 
 
 
 
 
 
 
 
 
 
 
Preliminary Statement of Operations Information
 
 
 
 
 
 
Full Year 2015, and Quarters within and Full Year 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our statement of operations information set forth below reflect these changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
6,279

 
$
6,014

 
$
6,029

 
$
5,802

 
$
24,124

 
$
23,321

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
 
4,688

 
4,474

 
4,362

 
4,441

 
17,965

 
17,608

General and administrative expenses
 
711

 
710

 
695

 
748

 
2,864

 
2,646

Total operating expenses
 
5,399

 
5,184

 
5,057

 
5,189

 
20,829

 
20,254

Operating income
 
880

 
830

 
972

 
613

 
3,295

 
3,067

Non-operating (income) expense, net
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
58

 
58

 
58

 
58

 
232

 
233

Interest income
 
(4
)
 
(4
)
 
(4
)
 
(4
)
 
(16
)
 
(11
)
Other (income) expense, net
 
1

 
(4
)
 
(1
)
 
(2
)
 
(6
)
 
4

Total non-operating (income) expense, net
 
55

 
50

 
53

 
52

 
210

 
226

Income from continuing operations before taxes
 
825

 
780

 
919

 
561

 
3,085

 
2,841

Federal and foreign income taxes
 
272

 
239

 
205

 
157

 
873

 
747

Income from continuing operations
 
553

 
541

 
714

 
404

 
2,212

 
2,094

Income (loss) from discontinued operations, net of tax
 
—

 
1

 
(1
)
 
1

 
1

 
13

Net income
 
553

 
542

 
713

 
405

 
2,213

 
2,107

Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
 
(2
)
 
(2
)
 
(4
)
 
(23
)
 
(31
)
 
(3
)
Net income attributable to Raytheon Company
 
$
555

 
$
544

 
$
717

 
$
428

 
$
2,244

 
$
2,110

 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.88

 
$
1.84

 
$
2.41

 
$
1.43

 
$
7.55

 
$
6.88

Income (loss) from discontinued operations, net of tax
 
—

 
—

 
—

 
—

 
—

 
0.04

Net income
 
1.88

 
1.84

 
2.41

 
1.43

 
7.56

 
6.92

 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
1.87

 
$
1.84

 
$
2.41

 
$
1.43

 
$
7.55

 
$
6.87

Income (loss) from discontinued operations, net of tax
 
—

 
—

 
—

 
—

 
—

 
0.04

Net income
 
1.88

 
1.84

 
2.41

 
1.43

 
7.55

 
6.91

 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts attributable to Raytheon Company common stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
555


$
543

 
$
718

 
$
427

 
$
2,243

 
$
2,097

Income (loss) from discontinued operations, net of tax
 
—

 
1

 
(1
)
 
1

 
1

 
13

Net income
 
$
555

 
$
544

 
$
717

 
$
428

 
$
2,244

 
$
2,110

 
 
 
 
 
 
 
 
 
 
 
 
 
Average shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
294.2

 
295.2

 
297.3

 
299.2

 
296.5

 
304.8

Diluted
 
294.5

 
295.5

 
297.6

 
299.6

 
296.8

 
305.2




Attachment B
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company
 

 
 
Preliminary Segment Information
 
 
 
 
 
 
 
 
 
 
 
 
Fourth Quarter 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
(In millions, except percentages)
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,406

 
$
1,558

 
$
219

 
$
281

 
15.6
%
 
18.0
%
Intelligence, Information and Services
 
1,518

 
1,537

 
121

 
111

 
8.0
%
 
7.2
%
Missile Systems
 
1,895

 
1,879

 
260

 
258

 
13.7
%
 
13.7
%
Space and Airborne Systems
 
1,612

 
1,576

 
231

 
239

 
14.3
%
 
15.2
%
Forcepoint
 
143

 
133

 
11

 
11

 
7.7
%
 
8.3
%
Eliminations
 
(323
)
 
(331
)
 
(32
)
 
(29
)
 


 


Total business segment
 
6,251

 
6,352

 
810

 
871

 
13.0
%
 
13.7
%
Acquisition Accounting Adjustments
 
(13
)
 
(24
)
 
(43
)
 
(59
)
 
 
 
 
FAS/CAS Adjustment
 
—

 
—

 
117

 
44

 
 
 
 
Corporate
 
—

 
—

 
(22
)
 
(28
)
 
 
 
 
Total
 
$
6,238

 
$
6,328

 
$
862

 
$
828

 
13.8
%
 
13.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
 
Net Sales
 
Operating Income
 
As a Percent of Net Sales
(In millions, except percentages)
 
Twelve Months Ended
 
Twelve Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
5,476

 
$
5,847

 
$
950

 
$
864

 
17.3
%
 
14.8
%
Intelligence, Information and Services
 
6,194

 
6,111

 
467

 
646

 
7.5
%
 
10.6
%
Missile Systems
 
7,071

 
6,556

 
916

 
868

 
13.0
%
 
13.2
%
Space and Airborne Systems
 
6,199

 
5,796

 
817

 
829

 
13.2
%
 
14.3
%
Forcepoint
 
566

 
328

 
51

 
30

 
9.0
%
 
9.1
%
Eliminations
 
(1,360
)
 
(1,330
)
 
(141
)
 
(140
)
 


 


Total business segment
 
24,146

 
23,308

 
3,060

 
3,097

 
12.7
%
 
13.3
%
Acquisition Accounting Adjustments
 
(77
)
 
(61
)
 
(198
)
 
(168
)
 
 
 
 
FAS/CAS Adjustment
 
—

 
—

 
435

 
185

 
 
 
 
Corporate
 
—

 
—

 
(57
)
 
(101
)
 
 
 
 
Total
 
$
24,069

 
$
23,247

 
$
3,240

 
$
3,013

 
13.5
%
 
13.0
%

 


Attachment B - Pro Forma
 
 
Raytheon Company
 
 
 
 
Preliminary Segment Information
 
 
 
 
 
 
Full Year 2015, and Quarters within and Full Year 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our segment information set forth below reflect these changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
Net Sales
(In millions)
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
1,460

 
$
1,334

 
$
1,399

 
$
1,336

 
$
5,529

 
$
5,848

Intelligence, Information and Services
 
1,516

 
1,534

 
1,587

 
1,532

 
6,169

 
6,137

Missile Systems
 
1,897

 
1,770

 
1,706

 
1,723

 
7,096

 
6,569

Space and Airborne Systems
 
1,600

 
1,590

 
1,547

 
1,445

 
6,182

 
5,814

Forcepoint
 
143

 
167

 
137

 
139

 
586

 
344

Eliminations
 
(324
)
 
(364
)
 
(326
)
 
(347
)
 
(1,361
)
 
(1,330
)
Total business segment
 
6,292

 
6,031

 
6,050

 
5,828

 
24,201

 
23,382

Acquisition Accounting Adjustments
 
(13
)
 
(17
)
 
(21
)
 
(26
)
 
(77
)
 
(61
)
Total
 
$
6,279

 
$
6,014

 
$
6,029

 
$
5,802

 
$
24,124

 
$
23,321

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
 
Operating Income
(In millions)
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
238

 
$
211

 
$
376

 
$
146

 
$
971

 
$
859

Intelligence, Information and Services
 
120

 
123

 
120

 
104

 
467

 
648

Missile Systems
 
261

 
235

 
233

 
192

 
921

 
877

Space and Airborne Systems
 
221

 
215

 
205

 
167

 
808

 
851

Forcepoint
 
21

 
41

 
10

 
18

 
90

 
56

Eliminations
 
(33
)
 
(42
)
 
(34
)
 
(33
)
 
(142
)
 
(140
)
Total business segment
 
828

 
783

 
910

 
594

 
3,115

 
3,151

Acquisition Accounting Adjustments
 
(43
)
 
(46
)
 
(51
)
 
(58
)
 
(198
)
 
(168
)
FAS/CAS Adjustment
 
117

 
104

 
109

 
105

 
435

 
185

Corporate
 
(22
)
 
(11
)
 
4

 
(28
)
 
(57
)
 
(101
)
Total
 
$
880

 
$
830

 
$
972

 
$
613

 
$
3,295

 
$
3,067

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income
As a Percentage of Net Sales
 
Operating Income
As a Percentage of Net Sales
 
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
16.3%
 
15.8%
 
26.9%
 
10.9%
 
17.6%
 
14.7%
Intelligence, Information and Services
 
7.9%
 
8.0%
 
7.6%
 
6.8%
 
7.6%
 
10.6%
Missile Systems
 
13.8%
 
13.3%
 
13.7%
 
11.1%
 
13.0%
 
13.4%
Space and Airborne Systems
 
13.8%
 
13.5%
 
13.3%
 
11.6%
 
13.1%
 
14.6%
Forcepoint
 
14.7%
 
24.6%
 
7.3%
 
12.9%
 
15.4%
 
16.3%
Eliminations
 
 
 
 
 
 
 
 
 
 
 
 
Total business segment
 
13.2%
 
13.0%
 
15.0%
 
10.2%
 
12.9%
 
13.5%
Acquisition Accounting Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
FAS/CAS Adjustment
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
14.0%
 
13.8%
 
16.1%
 
10.6%
 
13.7%
 
13.2%
 
 
 
 
 
 
 
 
 
 
 
 
 



Attachment C
 
 
 
 
 
 
 
 
 
 
 
 
 
Raytheon Company

 
 
 
 
 
 
 
 
Other Preliminary Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Fourth Quarter 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
Funded Backlog
 
Total Backlog
 
 
 
 
 
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
$
8,438

 
$
8,961

 
$
10,224

 
$
10,629

Intelligence, Information and Services
 
 
 
 
 
2,340

 
2,933

 
5,663

 
6,367

Missile Systems
 
 
 
 
 
 
9,008

 
7,998

 
11,617

 
10,885

Space and Airborne Systems
 
 
 
 
 
 
5,286

 
4,692

 
8,819

 
6,309

Forcepoint
 
 
 
 
 
 
532

 
476

 
532

 
479

Total
 
 
 
 
 
 
$
25,604

 
$
25,060

 
$
36,855

 
$
34,669

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
 
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Bookings
 
 
 
 
 
 
$
7,577

 
$
7,861

 
$
27,836

 
$
25,227

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
 
 
 
31-Dec-16
 
31-Dec-15
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Administrative and selling expenses
 
 
 
 
 
$
525

 
$
497

 
$
2,127

 
$
1,954

Research and development expenses
 
 
 
 
 
196

 
195

 
755

 
706

Total general and administrative expenses
 
 
 
 
 
$
721

 
$
692

 
$
2,882

 
$
2,660

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Attachment C - Pro Forma
 
 
Raytheon Company
 
 
 
 
 
 
 
 
Other Preliminary Information
 
 
 
 
 
 
 
 
 
 
 
 
Full Year 2015, and Quarters within and Full Year 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our other information set forth below reflect these changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
 
 
 
 
 
 
 
Remaining
Performance
Obligations
(Total Backlog)
 
 
 
 
 
 
 
 
 
 
31-Dec-16
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
 
 
 
 
 
 
 
 
$
10,159

 
 
Intelligence, Information and Services
 
 
 
 
 
 
 
 
 
5,662

 
 
Missile Systems
 
 
 
 
 
 
 
 
 
11,568

 
 
Space and Airborne Systems
 
 
 
 
 
 
 
 
 
8,834

 
 
Forcepoint
 
 
 
 
 
 
 
 
 
486

 
 
Total
 
 
 
 
 
 
 
 
 
$
36,709

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bookings
 
Bookings
(In millions)
 
Three Months Ended
 
Twelve Months Ended
 
 
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
 
 
 
 
 
 
 
 
 
 
 
 
 
Integrated Defense Systems
 
$
2,062

 
$
1,025

 
$
1,273

 
$
1,017

 
$
5,377

 
$
6,389

Intelligence, Information and Services
 
980

 
1,731

 
1,599

 
1,253

 
5,563

 
5,319

Missile Systems
 
2,439

 
1,932

 
1,891

 
1,632

 
7,894

 
8,149

Space and Airborne Systems
 
1,935

 
2,060

 
2,217

 
2,202

 
8,414

 
4,936

Forcepoint
 
166

 
175

 
123

 
97

 
561

 
352

Total
 
$
7,582

 
$
6,923

 
$
7,103

 
$
6,201

 
$
27,809

 
$
25,145

 
 
 
 
 
 
 
 
 
 
 
 
 



Attachment D
 
 
 
Raytheon Company

Preliminary Balance Sheet Information
 
Fourth Quarter 2016
 
 
 
 
(In millions)
 
 
 
 
31-Dec-16
 
31-Dec-15
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
3,303

 
$
2,328

Short-term investments
100

 
872

Contracts in process, net
6,202

 
5,564

Inventories
659

 
635

Prepaid expenses and other current assets
414

 
413

Total current assets
10,678

 
9,812

 
 
 
 
Property, plant and equipment, net
2,166

 
2,005

Goodwill
14,788

 
14,731

Other assets, net
2,420

 
2,733

Total assets
$
30,052

 
$
29,281

 
 
 
 
Liabilities, Redeemable Noncontrolling Interest and Equity
 
 
 
Current liabilities
 
 
 
Advance payments and billings in excess of costs incurred
$
2,239

 
$
2,193

Accounts payable
1,520

 
1,402

Accrued employee compensation
1,234

 
1,154

Other current liabilities
1,434

 
1,377

Total current liabilities
6,427

 
6,126

 
 
 
 
Accrued retiree benefits and other long-term liabilities
7,775

 
7,140

Long-term debt
5,335

 
5,330

 
 
 
 
Redeemable noncontrolling interest
449

 
355

 
 
 
 
Equity
 
 
 
Raytheon Company stockholders' equity
 
 
 
Common stock
3

 
3

Additional paid-in capital
—

 
398

Accumulated other comprehensive loss
(7,411
)
 
(7,176
)
Retained earnings
17,474

 
16,903

Total Raytheon Company stockholders' equity
10,066

 
10,128

Noncontrolling interests in subsidiaries
—

 
202

Total equity
10,066

 
10,330

Total liabilities, redeemable noncontrolling interest and equity
$
30,052

 
$
29,281



Attachment D - Pro Forma
 
Raytheon Company
 
Preliminary Balance Sheet Information
 
December 31, 2016
 
 
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our balance sheet information set forth below reflect these changes.
 
 
(In millions)
 
 
31-Dec-16
Assets
 
Current assets
 
Cash and cash equivalents
$
3,303

Short-term investments
100

Receivables, net
1,163

Contract assets
5,041

Inventories
608

Prepaid expenses and other current assets
670

Total current assets
10,885

 
 
Property, plant and equipment, net
2,166

Goodwill
14,788

Other assets, net
2,399

Total assets
$
30,238

 
 
Liabilities, Redeemable Noncontrolling Interest and Equity
 
Current liabilities
 
Contract liabilities
$
2,646

Accounts payable
1,520

Accrued employee compensation
1,234

Other current liabilities
1,139

Total current liabilities
6,539

 
 
Accrued retiree benefits and other long-term liabilities
7,758

Long-term debt
5,335

 
 
Redeemable noncontrolling interest
449

 
 
Equity
 
Raytheon Company stockholders' equity
 
Common stock
3

Additional paid-in capital
—

Accumulated other comprehensive loss
(7,411
)
Retained earnings
17,565

Total Raytheon Company stockholders' equity
10,157

Noncontrolling interests in subsidiaries
—

Total equity
10,157

Total liabilities, redeemable noncontrolling interest and equity
$
30,238




Attachment E
 
 
 
Raytheon Company

Preliminary Cash Flow Information
 
 
 
Fourth Quarter 2016
 
 
 
 
 
 
 
 
Twelve Months Ended
(In millions)
31-Dec-16
 
31-Dec-15
Cash flows from operating activities
 
 
 
Net income
$
2,174

 
$
2,067

(Income) loss from discontinued operations, net of tax
(1
)
 
(13
)
Income from continuing operations
2,173

 
2,054

Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of acquisitions and divestitures
 
 
 
Depreciation and amortization
515

 
489

Stock-based compensation
151

 
140

Gain on sale of equity method investment
(158
)
 
—

Deferred income taxes
109

 
(56
)
Tax benefit from stock-based awards
—

 
(47
)
Changes in assets and liabilities
 
 
 
Contracts in process, net and advance payments and billings in excess of costs incurred
(593
)
 
(637
)
Inventories
(23
)
 
(223
)
Prepaid expenses and other current assets
181

 
(28
)
Income taxes receivable/payable
(185
)
 
(181
)
Accounts payable
152

 
107

Accrued employee compensation
77

 
72

Other current liabilities
(6
)
 
58

Accrued retiree benefits
419

 
637

Other, net
40

 
(39
)
Net cash provided by (used in) operating activities from continuing operations
2,852

 
2,346

Net cash provided by (used in) operating activities from discontinued operations
—

 
13

Net cash provided by (used in) operating activities
2,852

 
2,359

Cash flows from investing activities
 
 
 
Additions to property, plant and equipment
(561
)
 
(406
)
Proceeds from sales of property, plant and equipment
34

 
59

Additions to capitalized internal use software
(64
)
 
(51
)
Purchases of short-term investments
(472
)
 
(1,392
)
Sales of short-term investments
—

 
209

Maturities of short-term investments
1,184

 
1,793

Payments for purchases of acquired companies, net of cash received
(57
)
 
(1,954
)
Other
(11
)
 
(2
)
Net cash provided by (used in) investing activities
53

 
(1,744
)
Cash flows from financing activities
 
 
 
Dividends paid
(850
)
 
(797
)
Repurchases of common stock under share repurchase programs
(900
)
 
(1,000
)
Repurchases of common stock to satisfy tax withholding obligations
(96
)
 
(99
)
Acquisition of noncontrolling interest in RCCS LLC
(90
)
 
—

Contribution from noncontrolling interests in Forcepoint
11

 
—

Tax benefit from stock-based awards
—

 
47

Sale of noncontrolling interest in Forcepoint
—

 
343

Other
(5
)
 
(3
)
Net cash provided by (used in) financing activities
(1,930
)
 
(1,509
)
Net increase (decrease) in cash and cash equivalents
975

 
(894
)
Cash and cash equivalents at beginning of the year
2,328

 
3,222

Cash and cash equivalents at end of period
$
3,303

 
$
2,328



Attachment E - Pro Forma
 
 
Raytheon Company
 
 
 
 
 
 
 
 
 
Preliminary Cash Flow Information
 
 
 
 
 
 
Full Year 2015, and Quarters within and Full Year 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The amounts and presentation of our cash flow information set forth below reflect these changes.
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
(In millions)
31-Dec-16
 
2-Oct-16
 
3-Jul-16
 
3-Apr-16
 
31-Dec-16
 
31-Dec-15
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
 
Net income
$
553

 
$
542

 
$
713

 
$
405

 
$
2,213

 
$
2,107

(Income) loss from discontinued operations, net of tax
—

 
(1
)
 
1

 
(1
)
 
(1
)
 
(13
)
Income from continuing operations
553

 
541

 
714

 
404

 
2,212

 
2,094

Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of acquisitions and divestitures
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
138

 
130

 
123

 
124

 
515

 
489

Stock-based compensation
31

 
31

 
35

 
54

 
151

 
140

Gain on sale of equity method investment
—

 
—

 
(158
)
 
—

 
(158
)
 
—

Deferred income taxes
217

 
(31
)
 
(23
)
 
(30
)
 
133

 
(42
)
Tax benefit from stock-based awards
—

 
—

 
—

 
—

 
—

 
(47
)
Changes in assets and liabilities
 
 
 
 
 
 
 
 
 
 
 
Receivables, net
82

 
186

 
(156
)
 
(94
)
 
18

 
12

Contracts assets and contract liabilities
280

 
(433
)
 
(197
)
 
(295
)
 
(645
)
 
(656
)
Inventories
27

 
(23
)
 
(55
)
 
41

 
(10
)
 
(187
)
Prepaid expenses and other current assets
(47
)
 
122

 
(13
)
 
143

 
205

 
(61
)
Income taxes receivable/payable
(107
)
 
(142
)
 
(125
)
 
189

 
(185
)
 
(181
)
Accounts payable
100

 
3

 
92

 
(43
)
 
152

 
107

Accrued employee compensation
102

 
18

 
308

 
(351
)
 
77

 
72

Other current liabilities
18

 
17

 
(33
)
 
(43
)
 
(41
)
 
17

Accrued retiree benefits
(274
)
 
248

 
224

 
221

 
419

 
637

Other, net
21

 
(27
)
 
10

 
5

 
9

 
(48
)
Net cash provided by (used in) operating activities from continuing operations
1,141

 
640

 
746

 
325

 
2,852

 
2,346

Net cash provided by (used in) operating activities from discontinued operations
—

 
—

 
(1
)
 
1

 
—

 
13

Net cash provided by (used in) operating activities
1,141

 
640

 
745

 
326

 
2,852

 
2,359

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
 
Additions to property, plant and equipment
(217
)
 
(107
)
 
(87
)
 
(150
)
 
(561
)
 
(406
)
Proceeds from sales of property, plant and equipment
9

 
24

 
—

 
1

 
34

 
59

Additions to capitalized internal use software
(17
)
 
(21
)
 
(14
)
 
(12
)
 
(64
)
 
(51
)
Purchases of short-term investments
—

 
—

 
(472
)
 
—

 
(472
)
 
(1,392
)
Sales of short-term investments
—

 
—

 
—

 
—

 
—

 
209

Maturities of short-term investments
362

 
223

 
472

 
127

 
1,184

 
1,793

Payments for purchases of acquired companies, net of cash received
—

 
—

 
—

 
(57
)
 
(57
)
 
(1,954
)
Other
(2
)
 
(15
)
 
6

 
—

 
(11
)
 
(2
)
Net cash provided by (used in) investing activities
135

 
104

 
(95
)
 
(91
)
 
53

 
(1,744
)
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
 
Dividends paid
(215
)
 
(216
)
 
(218
)
 
(201
)
 
(850
)
 
(797
)
Repurchases of common stock under share repurchase programs
(99
)
 
(199
)
 
(202
)
 
(400
)
 
(900
)
 
—

Repurchases of common stock to satisfy tax withholding obligations
(1
)
 
(3
)
 
(58
)
 
(34
)
 
(96
)
 
(1,000
)
Acquisition of noncontrolling interest in RCCS LLC
—

 
—

 
(90
)
 
—

 
(90
)
 
(99
)
Contribution from noncontrolling interests in Forcepoint
—

 
—

 
—

 
11

 
11

 
—

Tax benefit from stock-based awards
—

 
—

 
—

 
—

 
—

 
47

Sale of noncontrolling interest in Forcepoint
—

 
—

 
—

 
—

 
—

 
343

Other
—

 
—

 
—

 
(5
)
 
(5
)
 
(3
)
Net cash provided by (used in) financing activities
(315
)
 
(418
)
 
(568
)
 
(629
)
 
(1,930
)
 
(1,509
)
Net increase (decrease) in cash and cash equivalents
961

 
326

 
82

 
(394
)
 
975

 
(894
)
Cash and cash equivalents at beginning of the year
2,342

 
2,016

 
1,934

 
2,328

 
2,328

 
3,222

Cash and cash equivalents at end of period
$
3,303

 
$
2,342

 
$
2,016

 
$
1,934

 
$
3,303

 
$
2,328




Attachment F

 
 
Raytheon Company
 
 
 
 
 
Supplemental EPS Information
 
 
 
 
 
 
 
 
Fourth Quarter 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In millions, except per share amounts)
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
 
31-Dec-16

31-Dec-15
 
31-Dec-16
 
31-Dec-15
Per share impact of the FAS/CAS Adjustment (A)
$
0.26

 
$
0.10

 
$
0.95

 
$
0.39

Per share impact of the TRS transaction (B)
—

 
—

 
0.53

 
—

Per share impact of the eBorders settlement (C)
—

 
0.02

 
—

 
0.47

Per share impact of discretionary pension contributions (D)
0.04

 
0.02

 
0.04

 
0.02

 
 
 
 
 
 
 
 
 
 
 
 
(A)
FAS/CAS Adjustment
$
117

 
$
44

 
$
435

 
$
185

 
 
Tax effect (at 35% statutory rate)
(41
)
 
(15
)
 
(152
)
 
(65
)
 
After-tax impact
76

 
29

 
283

 
120

 
Diluted shares
294.5

 
302.1

 
296.8

 
305.2

 
Per share impact
$
0.26

 
$
0.10

 
$
0.95

 
$
0.39

 
 
 
 
 
 
 
 
 
 
 
 
(B)
TRS transaction
 
$
—

 
$
—

 
$
158

 
$
—

 
Diluted shares
 
—

 
—

 
296.8

 
—

 
Per share impact
 
$
—

 
$
—

 
$
0.53

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
(C)
eBorders settlement
 
$
—

 
$
—

 
$
—

 
$
181

 
 
Tax effect (at 21% blended global tax rate)
—

 
5

 
—

 
(38
)
 
After-tax impact
—

 
5

 
—

 
143

 
Diluted shares
 
—

 
302.1

 
—

 
305.2

 
Per share impact
 
$
—

 
$
0.02

 
$
—

 
$
0.47

 
 
 
 
 
 
 
 
 
(D)
Tax impact of discretionary pension contribution
$
13

 
$
5

 
$
13

 
$
5

 
Diluted shares
 
294.5

 
302.1

 
296.8

 
305.2

 
Per share impact
 
$
0.04

 
$
0.02

 
$
0.04

 
$
0.02